Your Right to Know

Maybe ... finally ... possibly, JobsOhio will get the $100 million annually it’s been counting
on for economic development.

The privatized nonprofit development agency created by Gov. John Kasich will proceed to the bond
market to issue about$1.5 billion in debt that would finance a complicated lease of the state’s
wholesale liquor profits and generate a funding stream for JobsOhio to help businesses locate and
expand in Ohio.

JobsOhio has been counting on this money since it was formally created through legislation early
in 2011, since it opened its doors in July 2011, and since it announced the details of its lease
agreement with the state one year ago, in January 2012. But the new agency was forced to wait in
part by legal challenges filed by Democrats and a liberal policy group in various courts.

“We wanted to get this thing done last year, and (the bond ratings) were one piece of the
process we’ve been working on,” said John Minor, JobsOhio’s chief investment officer.

Minor said the legal challenges “played into it somewhat” in terms of delaying JobsOhio’s lease
of the state’s liquor profits, “but I wouldn’t say it’s the only reason.”

JobsOhio has been operating on an undisclosed amount of private donations and on a $1 million
appropriation from the General Assembly in 2011.

Standard & Poor’s rated JobsOhio’s bonds “AA,” and Moody’s assigned them an “A2” rating.
There is still fluidity, however, because Minor would not say when JobsOhio will formally issue the
bonds or when the liquor-profits transfer will be complete.

The Ohio Supreme Court ended its term on Dec. 31 without issuing a decision on whether the
liberal group ProgressOhio and two Democratic legislators can sue. But a ruling on whether to
consider the case could come any day.

“There is $100 million being transferred. It’s a lot of money, and the people of Ohio deserve a
court to decide if it’s a constitutional action or not.”

Court observers say it’s taking the justices a long time to decide jurisdiction in the case,
which went to the Supreme Court in late July. But what that means about the outcome is anyone’s
guess. Three justices left the court last year, and their replacements have the option of joining
the remaining four jurists to rule on the case.

“If (the Kasich administration) turns out to be wrong, it’s going to create an absolute mess,”
said Maurice A. Thompson, executive director of the 1851 Center for Constitutional Law, a
conservative group in an uncommon alliance with ProgressOhio’s lawsuit. “We have a balanced-budget
requirement, so if they rely on this money, and it doesn’t come in, it will be an accounting
nightmare.”

Once the 25-year lease of the state’s liquor profits goes into effect, JobsOhio would pay the
state $500 million, which would go into the general-revenue fund, plus about $750 million to pay
off debts now backed by liquor profits. JobsOhio also would pay $150 million for Clean Ohio
environmental-revitalization projects submitted before July 1, 2012; make additional payments to
the state based on annual growth in profits from liquor sales; and pay as much as $43 million per
year for future revitalization projects.

In return, the profits generated by the state’s regulated liquor sales go to JobsOhio. The state
made $251.4 million in fiscal year 2012, about $237 million in 2011, and $229 million in 2010 from
its liquor business.

After JobsOhio fulfills its yearly debt-service obligations and covers operating costs, it would
have an estimated $100 million per year left for “economic development” — money that is earmarked
primarily for offers of loans and grants to companies seeking to expand or locate in Ohio.

Before Kasich created JobsOhio, all the state’s development deals were run through the
now-defunct Department of Development, and all financial incentives given to companies were made
public.

State-sponsored incentives, such as tax credits and grants, are still public, but any of the
supporting loans offered by JobsOhio would be protected by confidentiality agreements with the
companies receiving the help.